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It’s not just about the money.
Since Brussels turned the EU funding tap down to a trickle, Hungarian Prime Minister Viktor Orbán has begun putting through wide-ranging reforms to reopen the faucet for billions of euros earmarked for Hungary.
Some officials say money from Europe is the only real tool to enforce democratic norms — but whether such reforms are possible under the current government remains an open question.
The Hungarian prime minister loves to talk big, presenting himself on the international stage as a leading voice in conservative Christian politics.
But at home, his power rests on a far more basic concept: patronage.
Want a contract to build a road? A project for your village? A license for a radio station? A job for your struggling grandkid? For many Hungarians, the answer to these questions leads, directly or indirectly, to the ruling Fidesz party.
Orbán has won loyalty from a host of businesspeople, small-town politicians, television personalities and even musicians on the simple reasoning that supporting him is a good career move.
Keeping such a system running, however, requires vast resources. And for years, EU funds played a key role in sustaining it.
But now, the EU has made access to billions in coronavirus recovery funds contingent upon a long list of reforms, while suspending billions more in regular EU funds over rule-of-law concerns.
If state resources were suddenly distributed on merit, and if the prime minister’s closest family members and friends faced investigations over a long list of corruption allegations, the Orbán system could unravel, key experts observe.
“Corruption is part of the methodology of the government,” said Miklós Ligeti, legal director at Transparency International Hungary.
Full transparency along with depoliticization of the prosecutor’s service, police and the courts, Ligeti said, ”would definitely go against the logic of this kind of corruptly orchestrated system that Hungary is being governed under.”
On the other hand, if Brussels allowed Hungary to access billions in EU taxpayer funds without meaningful reforms, European officials would undercut their own credibility and risk political repercussions in the 2024 European Parliament election.
European Commission President Ursula von der Leyen is especially under pressure to keep the tap closed.
“I don’t think she can win this politically,” said German Green MEP Daniel Freund, a vocal critic of the Hungarian government, “without it being crystal clear that something has changed.”
Uncertain road to real reform
The Hungarian government has started implementing changes in order to access money from the EU’s coronavirus recovery fund — but watchdogs say it’s already failing to live up to promises.
The EU’s member states approved a plan for €5.8 billion in grants for Hungary under the bloc’s coronavirus recovery plan last December, with the caveat that Budapest needs to implement 27 reform targets — including strengthening judicial independence and putting in place new anti-corruption safeguards.
The coronavirus recovery funding includes a somewhat urgent timeline, since it must be accessed before the end of 2023.
Simultaneously, the bloc suspended €6.3 billion in regular funds over rule-of-law breaches that the EU has determined put the bloc’s budget at risk, with the understanding that the money may flow if Hungary shows that it effectively implemented promised reforms.
The December compromise relieved some of the pressure on Hungary’s ailing economy.
Yet the country still needs more cash. Ordinary Hungarians are feeling the pain of high energy costs and skyrocketing food prices, with even the head of the country’s central bank criticizing his own government’s economic policies.
And while experts see how some new regulations to improve transparency and combat corruption have been introduced, their impact has yet to be seen — with some structures appearing inherently flawed.
Anti-corruption reforms focus around a new Integrity Authority. But the new body “will have to rely” on the ineffective institutions that led to the establishment of this new authority in the first place, said András Léderer, head of advocacy at the Hungarian Helsinki Committee, a rights group.
Another key prerequisite is for Hungary to boost the powers of the National Judicial Council, a body of judges elected by judges, which helps supervise courts.
But even the judges themselves said a first draft of the government’s reforms did not fulfill its intended purpose.
An EU official confirmed that negotiations are ongoing between Brussels and Budapest on the content of proposed judicial changes.
In Brussels, some officials and politicians hope that Hungary’s leadership — given the economic pressures at home and the need to maintain international market confidence — will prioritize stability and implement the reforms.
The process is “not only about ticking boxes,” Budget Commissioner Johannes Hahn recently told reporters. “I think,” he added, that “there is now an interest to resolve the issue.”
And Hungarian officials have expressed confidence that Budapest can ultimately access the funds.
Tibor Navracsics, the Hungarian minister responsible for EU funds, told POLITICO following talks with the Commission last week that he is “optimistic that we can solve every problem incrementally.”
The human rights question
But as reforms inch forward, a possibly even larger issue looms.
When announcing an agreement on nearly €22 billion in regional development funds for Hungary under the bloc’s 2021 to 2027 budget, the European Commission quietly made it clear that a chunk of the money will not actually be accessible until Budapest complies with the EU’s Charter of Fundamental Rights.
Because the funding goes over a longer term, this could prove problematic for the country’s leadership.
“The Commission considers that the provisions of Hungary’s so-called child-protection law, and serious risks to academic freedom and the right to asylum have a concrete and direct impact on the compliance with the Charter,” the Commission wrote late last December.
Orbán has campaigned extensively over the past years on an anti-immigrant and anti-LGBTQ+ platform, while tightening government control over education institutions. In light of this, adherence to the charter would involve a major domestic political U-turn.
Hungarian officials have already indicated that this could be a step too far.
“There are some political debates which will remain,” said Balázs Orbán, the prime minister’s political director.
Beyond any political clash, the broader discussion over Hungary’s access to European money continues to elicit debate over the existential nature of what Orbán faces.
“The EU demands meaningful involvement of civil society, and rightfully so,” said Hungarian opposition MEP Katalin Cseh. “The problem is that implementing this demand would contradict the entire logic of the Orbán regime,” she said.
“So far, the European Commission has been lenient enough to let them get away with workarounds and superficial changes,” Cseh added. “This time may be different.”
Paola Tamma contributed reporting.
